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Freddie Mac CMHPI: National home value drop accelerates in Q3

National Mortgage Professional
Nov 30, 2008

Forward on reverse: Insights for marketing to maturity: Part I: Unlearn 20th century marketingAtare E. Agbamu, CRMSFHA financing, mortgage insurance premium, refinance The names mentioned in this article have been changed to preserve anonymity. Seven years ago, Michael Loja, his wife Victoria, and their six children came to America as the lucky winners of a U.S. visa lottery. They settled in the Twin Cities. A little over five years ago, the Loja family increased by one, an enchanting baby girl. A few months after their American daughter was born, breast cancer snatched Victoria from Michael and their children. The Lojas are family friends of ours and last year, Michael called me up and said that he wanted to buy a home, because living in an apartment with seven children was creating all sorts of issues with neighbors and the landlord. Besides, as a single widower, he wanted to raise his seven children in a more desirable neighborhood. With the help of my colleagues and an outstanding real estate agent, we put Michael and his seven children in a home with solid FHA financing and payments within his means. Early this year, Michael called to say that he wanted to come over to our house to show me a letter he received from the "government" about his mortgage. There was concern in his voice. I asked him to come over right away. The brown, official-looking envelope he had with him is probably familiar to many American homeowners and consumers. Most seasoned homeowners and consumers would have just torn it up and thrown it into the garbage as junk mail. But for this gentle, hardworking, God-fearing recent immigrant and new homeowner, it was novel and a little confusing. The letter inside invited him to call a toll free number to "claim" his mortgage insurance premium because "Congress just passed a new law that says every FHA borrower should get their mortgage insurance premium (MIP) back." However, the official-looking letter continued, Mr. Loja "must call the toll-free number to get his MIP back." I told Michael it was a lender's attempt to get him to refinance unnecessarily. To prove my point, with Michael looking on, I grabbed our kitchen phone and called the toll-free number. I pretended I was Michael Loja. Sure enough, the telemarketer on the other end said I have to "refinance with his company to get the MIP back." After five minutes or so of mind-games, I announced that I am a mortgage professional, that Michael Loja is a family friend, and that they must stop sending him their marketing materials disguised as official U.S. government letters, or else. As a seasoned professional, you know what all too often passes for marketing in our industry. Grab customers' attention by any means necessary—half-truths, blatant lies, false claims, hype, spin, sex-appeal, greed-appeal, fear-mongering, "gifts," "prizes," "awards," "half prices," "low, low prices," "sweepstakes," etc.—and induce them to buy whatever products or services we are selling. Every industry in our economy—indeed, the world economy—follows the same core logic, but with creative variations. Countless theories, articles and books have been written to make sense of it. It worked wonders for most of the last century. It still works sometimes with some consumers in some segments of the economy. It is the marketing worldview of the 20th century, or what international marketing expert and co-author of the groundbreaking book "Ageless Marketing" David B. Wolfe has called the "20th century marketing paradigm." In a recent telephone conversation from his Reston, Va. home, Mr. Wolfe puts it this way: "The 20th century marketing paradigm centered around Hucksterism: the aggressive, pushing approach in marketing, which seeks to conquer and overwhelm and manipulate consumers. Most marketing today still reflects elements of that. We've had, of course, Seth Godin with his book, "Permission Marketing," which has tried to pull us away from that. But for the most part, marketing still is a prey-and-predator game. That kind of marketing is out-of-date. It's obsolete. The 21st century marketing paradigm is about healing. It's about helping consumers become all they can become. It's helping them get through the challenges they have in their lives. It's about helping them process their lives." In other words, in order to step into the 21st century marketing classroom (where Mr. Wolfe is a leading thinker and teacher), our first task is to unlearn Hucksterism in all of its forms. It is not going to be easy because of our human tendency to resist change, but it is the prerequisite for marketing in the new century. In the series I am beginning this month, "Insights for Marketing to Maturity," I will be sharing with you some of Mr. Wolfe's radical thinking and insights into what we must call the "21st century marketing paradigm." His ideas, thinking and marketing prescriptions will also be featured in my upcoming book on marketing and originating reverse for mortgage brokers and lenders, "Forward on Reverse." Whether you are a forward or reverse mortgage broker or lender, you will profit handsomely from the revolutionary marketing ideas that the series will deliver. The customers who made Hucksterism successful are changing or already have changed. You can see the future of marketing from the work of David Wolfe. Meanwhile, after my somewhat heated conversation with the telemarketer, I tore up the "government" letter and threw it where belonged. Michael Loja was visibly relieved. He thanked me and went home to his seven children. Think reverse, move forward! Atare Agbamu is the author of Think Reverse! (The Mortgage Press, 2008) and more than 100 articles on reverse mortgages. He is a reverse mortgage specialist in Minnesota and an adviser to older adults, their families, professionals and institutions across the country. He may be reached by phone at (612) 203-9434 or e-mail [email protected] To offer comments on his book, visit / and click on the Bookfeedback page.
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